Second
Second-charge bridging loans allow you to raise capital against an existing property without disturbing your first mortgage—useful for short-term refurbishment funding or bridging a deposit gap.
Second-charge bridging loans allow you to raise capital against an existing property without disturbing your first mortgage—useful for short-term refurbishment funding or bridging a deposit gap.
When a developer needs to unlock capital from an existing property portfolio, remortgaging is often unappealing because it involves breaking a highly favorable long-term fixed rate and paying hefty Early Repayment Charges (ERCs). Second-charge bridging finance solves this by allowing the borrower to secure a short-term loan against the remaining equity in the property, sitting 'behind' the existing first-charge mortgage.
For example, if a property is worth £500,000 and has a £250,000 first-charge mortgage, the borrower has £250,000 in equity. A second-charge lender might provide a £100,000 bridging loan against that equity. This capital can be used to fund the deposit on a new development site, cover urgent refurbishment costs, or bridge a cashflow gap. Because second-charge lenders take on more risk (the first lender gets paid first in the event of repossession), interest rates are typically higher, but the speed and flexibility make it an invaluable tool.